When would the testing of debtors be carried out

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A theme park business has a website that allows customers to make bookings online. The customers include the general public and local and international travel agents. Travel agents that wish to be able to make bookings on credit must complete an account application form with at least three references. The auditor's tests provide sufficient appropriate audit evidence that credit is granted only after rigorous credit checks. However, large travel agents often settle their accounts between 60 and 90 days (not the required 30 days). Given the amount of business generated from these travel agents, the theme park business allows this practice to continue. The business has 720 travel agents as customers. Forty agents represent 65 per cent of trade debtors.

Required

Problem (a) Discuss which debtors would be selected for further testing.

Problem (b) When would the testing of debtors be carried out?

Reference no: EM132877365

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